Thought Leaders: Chester Barnard – Managing Company Values

Chester Barnard spent forty years at Bell Telephone Company. During his rise to the top, he studied:

How people make decisions

Business relationships

The role of the corporate executive. He decided that the most important, and the most common quality he saw exhibited, was that of loyalty to the organization.

He concluded that the power of an organization was based on willing individuals co-operating to achieve a common purpose. Today, we consider this rather obvious, but in the 1930’s, business culture was more oriented towards “command and control” where individuals were seen more as simple functionaries than contributors to improvement. This led him to consider concepts such as:

The leader’s primary purpose is to manage the organization’s values in order to create a business culture where individuals want to contribute to overall success.

Individuals should want to contribute because they are committed to both the organization and to the purpose behind the tasks at hand.

Corporations are made up of individuals who belong to sub-groups within the larger department or division.

Those smaller groups are informal and less structured.

Individuals in those informal groups are motivated by social processes rather than corporate purpose.

The motivation that drives the smaller groups, as long as it is positive, needs to be harnessed to the greater good.

Effective management is more important than efficient management. By that he meant enabling and encouraging individuals and groups to contribute to corporate goals is more important than performing isolated tasks with minimum waste of time or materials.

Effective Corporate Culture

Knowing those conclusions is a foundation. The leader’s purpose is to make use of them. Barnard decided that a business’s values matter to the individual. Individuals may be low on the totem pole, but they belong to groups of colleagues and associates, both within and between functional departments.

Those groups can perform and contribute to the overall business purpose or they can simply function efficiently, leaving the management team to carry the burden of success. Barnard established three basic principles of effective corporate culture so everyone can understand “what it’s all about” and share both opinions and ideas:

People should be able to communicate both horizontally and vertically within the organization.

People should know how to communicate.

It should be easy to communicate.

The Take-Away

Individuals are motivated to keep their heads down and “just do their jobs” or they are motivated to exceed their basic job description. The more that individuals and groups feel included, involved and valued, the more they want to contribute.

Today’s technology enables and allows easy, immediate and broad communication. When employees know that good ideas matter and are encouraged, they are more likely to share and act on them. When good ideas do not matter, the informal, social communication will still continue, but it is likely to be negative or, at best, neutral. The “sense of belonging” to the group may be as high up Maslow’s Hierarchy of Needs most people will aspire.

Businesses succeed more when its values encourage good ideas from everyone. Rewarding individuals for their ideas encourages new ideas and further success. Individuals who want to belong to a dynamic and successful group, also want to be recognized, and many want to climb as high as they can.

One of our values is wanting to find the right people for your business. Please contact us to learn more about our expertise in Executive Search for Commercial Leadership positions in Medical Device and Biotechnology; including Marketing, Strategy, Sales Leadership, Training, Development, etc. We look forward to the opportunity to help you consistently improve your performance and your business!

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